Recently, the US accounting industry has seen a surge of cyberattacks that has put hundreds of small accounting companies on alert. With the tax season in full swing and more businesses becoming digital, hackers are discovering new ways to target businesses which handle private financial data. From social security numbers to payroll records and tax returns, CPAs manage useful but frequently under protected information.
For accounting outsourcing services, cybersecurity has become more important than ever before. If you want your firm to be secure, follow this simple cybersecurity checklist made for the U.S. CPA companies. If you are a solo accountant or even if you operate a big financial firm, this guide can help you create a defense which safeguards your customers, your reputation, and your company.
Why Accounting Firms Are a Top Target for Hackers?
Before we get in to the checklist, let us understand why cybersecurity for accounting firms is a must-have :
- You manage important financial information: Hackers look for information they can easily sell, use for a crime or hold for ransom.
- You use connected systems: Cloud tools, client portals and email make you easily accessible and potentially vulnerable.
- You face compliance regulations: Data protection rules like GLBA and IRS standards require you to safeguard client data.
So essentially, you are a goldmine for cybercriminals. And without protection, you are also a liability for your clients.
The Essential Cybersecurity Checklist for Accounting Firms
Here is a simple cybersecurity checklist to help your accounting company defend itself step by step:
1. Update Software & Systems Regularly
Outdated software is a hacker's best friend. Make sure:
- Your accounting programs, operating systems and antivirus tools are automatically updated.
- Security patches are applied without delay.
- Avoid using unsupported versions of any application.
Remember that unpatched systems leave gaps that attackers can exploit.
2. Use Multi-Factor Authentication or MFA
MFA provides extra protection beyond passwords. It requires:
- A password and,
- A second step, like a code sent to your phone or fingerprint scan.
Where to apply MFA: Email accounts, cloud drives, accounting software, banking access and client portals.
3. Train Your Team on Cybersecurity Basics
Most data breaches are because of human error. Even a simple incorrect click could be disastrous. Make cybersecurity training a routine:
- Teach your team to identify phishing messages.
- Train them to use strong, unique passwords.
- Hold quarterly refreshers and also simulate scam tests.
Also, make sure you document your training to satisfy IRS data protection regulations.
4. Limit Access With Role Based Controls
Not everybody needs access to all data in your office. Use the "need-to-know" principle:
- Simply give employees only such things that they need to perform the job.
- Set up role-based access in your accounting systems.
- Regularly review and update access permissions.
Less people with access means fewer risks if an account is hacked.
5. Encrypt All Sensitive information
Encryption prevents data from being read or used even if it is stolen.
- Encrypt both data at rest (stored files) and data in transit (emails, messages).
- Use trusted, industry standard encryption tools.
- Include encryption in your file sharing and backup processes.
Data protection for CPAs is not just about using a password. Encryption renders your files unreadable without the correct key.
6. Backup Data Automatically and Securely
A cyberattack might lock or wipe your data completely. A backup plan helps you save it with these safeguards:
- Backup files daily (automatically).
- Keep backups offsite or on the cloud.
- Ensure recovery works by testing your backups monthly.
Remember to make at least one offline backup which is not connected to your network.
7. Install and Maintain Firewalls
Firewalls block outside threats to your network. Consider them as your digital security guards.
- Use hardware (router level) & software (device level) firewalls.
- Keep firewall settings current.
- Watch firewall logs for suspicious activity frequently.
Note that firewalls get rid of unsafe connections before they enter your systems.
8. Conduct Regular Security Audits
A cybersecurity audit can help you:
- Determine weak spots.
- Test how secure your setup is.
- Adhere to cybersecurity compliance in accounting.
Be sure your cybersecurity audit checklist includes:
- Access controls checks.
- Encryption verification.
- Backup testing.
- Firewall and antivirus performance.
The best practice is to have an outside security advisor audit your systems annually.
9. Monitor Network Activity and Set Alerts
Early detection could deter a cyberattack before it starts. To do this:
- Set up real time monitoring tools.
- Set alerts for unusual logins or data transfers.
- Review logs weekly/use automated analysis tools.
For example, if somebody tries logging in from another country at 3 AM, you will still get an alert.
10. Develop an Incident Response Plan for Cyber Incidents
You need a response plan of what to do if a cyberattack occurs. Your incident response plan ought to include :
- Exactly who does what when there is a breach.
- How clients will likely be notified.
- What happens to stop and fix the damage.
- How you'll report the breach (IRS, regulators), clients.
Test this plan once every year with your team to stay updated.
11. Secure Your Email and Use Spam Filters
Email is a simple and well-known way hackers use to get into your systems.
- Send client data via encrypted email services.
- Put in spam filters to detect phishing messages.
- Avoid personal email addresses for business.
Note: Use domain based email authentication (SPF, DKIM, DMARC) to prevent spoofing.
12. Run Penetration Tests
Penetration testing ("pen testing") is like employing a hacker to discover your weaknesses.
- Prepare for a realistic cyberattack by having someone attack you (as a test).
- Fix the flaws they find.
- Document the outcomes.
Pen testing isn't just for big companies - it is just as vital for cybersecurity for CPAs in the USA.
Final Thoughts
If you handle personal, financial or tax data as an accounting or CPA firm, you are already a primary target for cybercriminals. Cybercriminals don’t care whether you're a small accounting firm or a big one. They only care if you are easy to breach.
This cybersecurity checklist for accounting companies provides a practical framework for your firm to mitigate future risks. And the best news is that you don't need a tech expert; you simply have to have a plan and the discipline to stick to it.
So, if you offer accounting services or ise accounting outsourced services, make cybersecurity a top priority. It protects your client, it protects your firm and it protects your future.
